Shareholders have launched a class action against the Star Entertainment Group over its failure to disclose money laundering links to organised crime.
Filed by Shine Lawyers, the action alleges revelations of alleged misconduct caused the company’s stock price to plummet.
The action states that Star allegedly failed to disclose to the market about money laundering, links to organised crime, fraud, corruption and terrorism-financing risks.
It also failed to disclose the associated regulatory risk of the misconduct despite being raised in a 2018 report by KPMG.
The casino company was found unsuitable to hold a casino licence in NSW and Queensland following allegations of fraud, money laundering and links to organised crime.
Star’s share price plummeted almost 25 per cent and has lost more than $1 billion off its market value following scathing government probes,
Investors were the biggest losers of Star’s gamble with the truth, Shine class actions head Craig Allsopp said.
“We allege Star knew, or ought to have known, that this wide-ranging misconduct occurred and that it would have a hugely detrimental impact for its shareholders once exposed,” Mr Allsopp said.
“Star represented to investors that it was a safe bet when it was anything but, and we’ll be looking to hold Star to account for their losses.”
The class action alleges Star’s conduct was misleading, deceptive and in conflict with the interests of its shareholders.
It further alleges the company was in breach of its continuous disclosure obligations.
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